Pennsylvania
|
23-2486815
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
50 South 16
th
Street, Philadelphia, Pennsylvania
|
19102
|
(Address of principal executive offices)
|
(Zip code)
|
Large accelerated filer [ ]
|
Accelerated filer
[X]
|
Non-Accelerated filer [ ]
(Do not check if a smaller reporting company)
|
Smaller reporting company [ ] |
Emerging growth company [ ]
|
Common Stock, $0.01 per share
|
58,759,853
|
Title of Class
|
Number of Shares Outstanding as of August 6, 2018
|
June 30, 2018
|
December 31, 2017
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
29,363
|
$
|
36,073
|
||||
Interest bearing deposits with banks
|
29,991
|
25,869
|
||||||
Cash and cash equivalents
|
59,354
|
61,942
|
||||||
|
||||||||
Investment securities available for sale, at fair value
|
502,021
|
464,430
|
||||||
Investment securities held to maturity, at amortized cost (fair value of $483,994 and $463,799, respectively)
|
503,742
|
472,213
|
||||||
Restricted stock, at cost
|
8,379
|
1,918
|
||||||
Mortgage loans held for sale, at fair value
|
36,090
|
43,375
|
||||||
Other loans held for sale
|
3,211
|
2,325
|
||||||
Loans receivable (net of allowance for loan losses of $7,566 and $8,599, respectively)
|
1,310,012
|
1,153,679
|
||||||
Premises and equipment, net
|
80,069
|
74,947
|
||||||
Other real estate owned, net
|
6,559
|
6,966
|
||||||
Accrued interest receivable
|
8,019
|
7,009
|
||||||
Goodwill
|
5,011
|
5,011
|
||||||
Other assets
|
30,453
|
28,532
|
||||||
Total Assets
|
$
|
2,552,920
|
$
|
2,322,347
|
||||
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Liabilities
|
||||||||
Deposits
|
||||||||
Demand – non-interest bearing
|
$
|
526,650
|
$
|
438,500
|
||||
Demand – interest bearing
|
785,513
|
807,736
|
||||||
Money market and savings
|
698,182
|
700,322
|
||||||
Time deposits
|
123,796
|
116,737
|
||||||
Total Deposits
|
2,134,141
|
2,063,295
|
||||||
Short-term borrowings
|
161,669
|
-
|
||||||
Accrued interest payable
|
408
|
293
|
||||||
Other liabilities
|
10,112
|
10,618
|
||||||
Subordinated debt
|
11,256
|
21,681
|
||||||
Total Liabilities
|
2,317,586
|
2,095,887
|
||||||
Shareholders' Equity
|
||||||||
Preferred stock, par value $0.01 per share: 10,000,000 shares authorized; no shares issued and outstanding
|
-
|
-
|
||||||
Common stock, par value $0.01 per share: 100,000,000 shares authorized; shares issued 59,288,698 as of June 30, 2018 and 57,518,609 as of December 31, 2017; shares outstanding 58,759,853 as of June 30, 2018 and 56,989,764 as of December 31, 2017
|
593
|
575
|
||||||
Additional paid in capital
|
267,974
|
256,285
|
||||||
Accumulated deficit
|
(13,195
|
)
|
(18,983
|
)
|
||||
Treasury stock at cost (503,408 shares as of June 30, 2018 and December 31, 2017)
|
(3,725
|
)
|
(3,725
|
)
|
||||
Stock held by deferred compensation plan (25,437 shares as of June 30, 2018 and December 31, 2017)
|
(183
|
)
|
(183
|
)
|
||||
Accumulated other comprehensive loss
|
(16,130
|
)
|
(7,509
|
)
|
||||
Total Shareholders' Equity
|
235,334
|
226,460
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
2,552,920
|
$
|
2,322,347
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Interest income:
|
||||||||||||||||
Interest and fees on taxable loans
|
$
|
15,082
|
$
|
12,069
|
$
|
28,989
|
$
|
23,010
|
||||||||
Interest and fees on tax-exempt loans
|
375
|
261
|
737
|
519
|
||||||||||||
Interest and dividends on taxable investment securities
|
6,676
|
4,777
|
13,025
|
9,510
|
||||||||||||
Interest and dividends on tax-exempt investment securities
|
128
|
154
|
237
|
348
|
||||||||||||
Interest on federal funds sold and other interest-earning assets
|
63
|
70
|
235
|
131
|
||||||||||||
Total interest income
|
22,324
|
17,331
|
43,223
|
33,518
|
||||||||||||
Interest expense:
|
||||||||||||||||
Demand- interest bearing
|
1,549
|
695
|
2,806
|
1,303
|
||||||||||||
Money market and savings
|
1,174
|
732
|
2,146
|
1,430
|
||||||||||||
Time deposits
|
366
|
295
|
735
|
591
|
||||||||||||
Other borrowings
|
573
|
342
|
758
|
708
|
||||||||||||
Total interest expense
|
3,662
|
2,064
|
6,445
|
4,032
|
||||||||||||
Net interest income
|
18,662
|
15,267
|
36,778
|
29,486
|
||||||||||||
Provision for loan losses
|
800
|
500
|
1,200
|
500
|
||||||||||||
Net interest income after provision for loan losses
|
17,862
|
14,767
|
35,578
|
28,986
|
||||||||||||
Non-interest income:
|
||||||||||||||||
Loan and servicing fees
|
372
|
316
|
519
|
653
|
||||||||||||
Mortgage banking income
|
3,182
|
2,971
|
5,368
|
5,392
|
||||||||||||
Gain on sales of SBA loans
|
846
|
796
|
1,838
|
1,484
|
||||||||||||
Service fees on deposit accounts
|
1,326
|
907
|
2,501
|
1,753
|
||||||||||||
Loss on sale of investment securities
|
(1
|
)
|
(61
|
)
|
(1
|
)
|
(61
|
)
|
||||||||
Other non-interest income
|
43
|
40
|
78
|
86
|
||||||||||||
Total non-interest income
|
5,768
|
4,969
|
10,303
|
9,307
|
||||||||||||
Non-interest expenses:
|
||||||||||||||||
Salaries and employee benefits
|
10,883
|
9,389
|
21,528
|
17,971
|
||||||||||||
Occupancy
|
1,888
|
1,752
|
4,001
|
3,467
|
||||||||||||
Depreciation and amortization
|
1,465
|
1,121
|
2,822
|
2,296
|
||||||||||||
Legal
|
349
|
127
|
640
|
379
|
||||||||||||
Other real estate owned
|
192
|
612
|
503
|
958
|
||||||||||||
Appraisal and other loan expenses
|
455
|
381
|
733
|
823
|
||||||||||||
Advertising
|
297
|
222
|
626
|
467
|
||||||||||||
Data processing
|
940
|
765
|
1,764
|
1,550
|
||||||||||||
Insurance
|
217
|
200
|
509
|
473
|
||||||||||||
Professional fees
|
510
|
507
|
978
|
935
|
||||||||||||
Regulatory assessments and costs
|
395
|
324
|
862
|
653
|
||||||||||||
Taxes, other
|
245
|
238
|
490
|
474
|
||||||||||||
Other operating expenses
|
2,893
|
2,047
|
5,375
|
4,043
|
||||||||||||
Total non-interest expense
|
20,729
|
17,685
|
40,831
|
34,489
|
||||||||||||
Income before provision (benefit) for income taxes
|
2,901
|
2,051
|
5,050
|
3,804
|
||||||||||||
Provision (benefit) for income taxes
|
530
|
(8
|
)
|
902
|
(42
|
)
|
||||||||||
Net income
|
$
|
2,371
|
$
|
2,059
|
$
|
4,148
|
$
|
3,846
|
||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$
|
0.04
|
$
|
0.04
|
$
|
0.07
|
$
|
0.07
|
||||||||
Diluted
|
$
|
0.04
|
$
|
0.04
|
$
|
0.07
|
$
|
0.07
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net income
|
$
|
2,371
|
$
|
2,059
|
$
|
4,148
|
$
|
3,846
|
||||||||
Other comprehensive income (loss), net of tax
|
||||||||||||||||
Unrealized (losses) gains on securities (pre-tax ($2,300)
$1,651, ($9,008), and $2,622, respectively)
|
(1,797
|
)
|
1,058
|
(7,036
|
)
|
1,681
|
||||||||||
Reclassification adjustment for securities losses
(pre-tax $1, $61, $1, and $61, respectively)
|
1
|
39
|
1
|
39
|
||||||||||||
Net unrealized gains (losses) on securities
|
(1,796
|
)
|
1,097
|
(7,035
|
)
|
1,720
|
||||||||||
Net unrealized holding losses on securities transferred
from available-for-sale to held-to-maturity:
|
||||||||||||||||
Amortization of net unrealized holding losses to
income during the period (pre-tax $30, $43, $69,
and $85 respectively)
|
23
|
28
|
54
|
55
|
||||||||||||
Total other comprehensive income (loss)
|
(1,773
|
)
|
1,125
|
(6,981
|
)
|
1,775
|
||||||||||
Total comprehensive income (loss)
|
$
|
598
|
$
|
3,184
|
$
|
(2,833
|
)
|
$
|
5,621
|
Six Months Ended June 30,
|
||||||||
2018
|
2017
|
|||||||
Cash flows from operating activities
|
||||||||
Net income
|
$
|
4,148
|
$
|
3,846
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for loan losses
|
1,200
|
500
|
||||||
Write down of other real estate owned
|
-
|
258
|
||||||
Depreciation and amortization
|
2,822
|
2,296
|
||||||
Stock based compensation
|
1,052
|
817
|
||||||
Loss (gain) on sale of investment securities
|
1
|
61
|
||||||
Amortization of premiums on investment securities
|
1,497
|
1,191
|
||||||
Accretion of discounts on retained SBA loans
|
(678
|
)
|
(646
|
)
|
||||
Fair value adjustments on SBA servicing assets
|
833
|
636
|
||||||
Proceeds from sales of SBA loans originated for sale
|
24,283
|
17,692
|
||||||
SBA loans originated for sale
|
(23,331
|
)
|
(17,294
|
)
|
||||
Gains on sales of SBA loans originated for sale
|
(1,838
|
)
|
(1,484
|
)
|
||||
Proceeds from sales of mortgage loans originated for sale
|
156,560
|
173,501
|
||||||
Mortgage loans originated for sale
|
(145,366
|
)
|
(169,467
|
)
|
||||
Fair value adjustment for mortgage loans originated for sale
|
41
|
(302
|
)
|
|||||
Gains on mortgage loans originated for sale
|
(4,058
|
)
|
(4,128
|
)
|
||||
Amortization of intangible assets
|
-
|
52
|
||||||
Amortization of debt issuance costs
|
3
|
15
|
||||||
Increase in accrued interest receivable and other assets
|
(807
|
)
|
(2,080
|
)
|
||||
Net (increase) decrease in accrued interest payable and other liabilities
|
(616
|
)
|
2,752
|
|||||
Net cash provided by operating activities
|
15,746
|
8,216
|
||||||
Cash flows from investing activities
|
||||||||
Purchase of investment securities available for sale
|
(79,595
|
)
|
(10,311
|
)
|
||||
Purchase of investment securities held to maturity
|
(61,083
|
)
|
-
|
|||||
Proceeds from the sale of securities available for sale
|
5,713
|
21,167
|
||||||
Proceeds from the maturity or call of securities available for sale
|
26,378
|
15,762
|
||||||
Proceeds from the maturity or call of securities held to maturity
|
28,030
|
22,583
|
||||||
Purchase of restricted stock
|
(6,461
|
)
|
(2,512
|
)
|
||||
Net increase in loans
|
(156,855
|
)
|
(101,222
|
)
|
||||
Net proceeds from sale of other real estate owned
|
407
|
136
|
||||||
Premises and equipment expenditures
|
(7,944
|
)
|
(10,727
|
)
|
||||
Net cash used in investing activities
|
(251,410
|
)
|
(65,124
|
)
|
||||
Cash flows from financing activities
|
||||||||
Net proceeds from exercise of stock options
|
561
|
590
|
||||||
Net increase in demand, money market and savings deposits
|
63,787
|
59,124
|
||||||
Net increase (decrease) in time deposits
|
7,059
|
(4,363
|
)
|
|||||
Increase in short-term borrowings
|
161,669
|
55,000
|
||||||
Net cash provided by financing activities
|
233,076
|
110,351
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(2,588
|
)
|
53,443
|
|||||
Cash and cash equivalents, beginning of year
|
61,942
|
34,554
|
||||||
Cash and cash equivalents, end of period
|
$
|
59,354
|
$
|
87,997
|
||||
Supplemental disclosures
|
||||||||
Interest paid
|
$
|
6,330
|
$
|
4,159
|
||||
Income taxes paid
|
$
|
-
|
$
|
75
|
||||
Non-cash transfers from loans to other real estate owned
|
$
|
-
|
$
|
129
|
||||
Conversion of subordinated debt to common stock
|
$
|
10,094
|
$
|
240
|
Common
Stock
|
Additional
Paid in
Capital
|
Accumulated
Deficit
|
Treasury
Stock
|
Stock Held by Deferred Compensation
Plan
|
Accumulated
Other
Comprehensive
Loss
|
Total
Shareholders'
Equity
|
||||||||||||||||||||||||||||
Balance January 1, 2018
|
$
|
575
|
$
|
256,285
|
$
|
(18,983)
|
$
|
(3,725)
|
$
|
(183)
|
$
|
(7,509)
|
$
|
226,460
|
||||||||||||||||||||
Reclassification due to the adoption of ASU 2018-02
|
1,640
|
(1,640)
|
-
|
|||||||||||||||||||||||||||||||
Net income
|
4,148
|
4,148
|
||||||||||||||||||||||||||||||||
Other comprehensive loss,
net of tax
|
(6,981)
|
(6,981)
|
||||||||||||||||||||||||||||||||
Stock based compensation
|
1,052
|
1,052
|
||||||||||||||||||||||||||||||||
Conversion of subordinated debt to common stock (1,624,614 shares)
|
16
|
10,078
|
10,094
|
|||||||||||||||||||||||||||||||
Options exercised
(145,475 shares)
|
2
|
559
|
561
|
|||||||||||||||||||||||||||||||
Balance June 30, 2018
|
$
|
593
|
$
|
267,974
|
$
|
(13,195)
|
$
|
(3,725)
|
$
|
(183)
|
$
|
(16,130)
|
$
|
235,334
|
||||||||||||||||||||
Balance January 1, 2017
|
$
|
573
|
$
|
253,570
|
$
|
(27,888)
|
$
|
(3,725)
|
$
|
(183)
|
$
|
(7,294)
|
$
|
215,053
|
||||||||||||||||||||
Net income
|
3,846
|
3,846
|
||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax
|
1,775
|
1,775
|
||||||||||||||||||||||||||||||||
Stock based compensation
|
817
|
817
|
||||||||||||||||||||||||||||||||
Conversion of subordinated debt to common stock (36,922 shares)
|
240
|
240
|
||||||||||||||||||||||||||||||||
Options exercised
(179,475 shares)
|
2
|
588
|
590
|
|||||||||||||||||||||||||||||||
Balance June 30, 2017
|
$
|
575
|
$
|
255,215
|
$
|
(24,042)
|
$
|
(3,725)
|
$
|
(183)
|
$
|
(5,519)
|
$
|
222,321
|
2018
|
2017
|
||||
Dividend yield
(1)
|
0.0%
|
0.0%
|
|||
Expected volatility
|
28.22%
|
(2)
|
45.50% to 50.09%
|
(3)
|
|
Risk-free interest rate
(4)
|
2.35% to 2.91%
|
1.89% to 2.26%
|
|||
Expected life
(5)
|
6.25 years
|
5.5 to 7.0 years
|
|||
Assumed forfeiture rate
(6)
|
4.0%
|
6.0%
|
2018
|
2017
|
||||||||
Stock based compensation expense recognized
|
$
|
1,052,000
|
$
|
817,000
|
|||||
Number of unvested stock options
|
1,968,663
|
1,691,102
|
|||||||
Fair value of unvested stock options
|
$
|
5,555,672
|
$
|
4,596,379
|
|||||
Amount remaining to be recognized as expense
|
$
|
4,387,864
|
$
|
3,453,675
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net income (basic and diluted)
|
$
|
2,371
|
$
|
2,059
|
$
|
4,148
|
$
|
3,846
|
||||||||
Weighted average shares outstanding
|
58,746
|
56,945
|
57,927
|
56,885
|
||||||||||||
Net income per share – basic
|
$
|
0.04
|
$
|
0.04
|
$
|
0.07
|
$
|
0.07
|
||||||||
Weighted average shares outstanding (including dilutive CSEs)
|
59,911
|
58,301
|
59,147
|
58,165
|
||||||||||||
Net income per share – diluted
|
$
|
0.04
|
$
|
0.04
|
$
|
0.07
|
$
|
0.07
|
(in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Anti-dilutive securities
|
||||||||||||||||
Share based compensation awards
|
2,721
|
1,688
|
2,666
|
1,764
|
||||||||||||
Convertible securities
|
-
|
1,625
|
-
|
1,625
|
||||||||||||
Total anti-dilutive securities
|
2,721
|
3,313
|
2,666
|
3,389
|
At June 30, 2018
|
||||||||||||||||
(dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Collateralized mortgage obligations
|
$
|
361,142
|
$
|
-
|
$
|
(14,200
|
)
|
$
|
346,942
|
|||||||
Agency mortgage-backed securities
|
71,668
|
1
|
(2,287
|
)
|
69,382
|
|||||||||||
Municipal securities
|
19,042
|
6
|
(470
|
)
|
18,578
|
|||||||||||
Corporate bonds
|
62,626
|
94
|
(3,106
|
)
|
59,614
|
|||||||||||
Asset-backed securities
|
6,982
|
-
|
(24
|
)
|
6,958
|
|||||||||||
Trust preferred securities
|
725
|
-
|
(178
|
)
|
547
|
|||||||||||
Total securities available for sale
|
$
|
522,185
|
$
|
101
|
$
|
(20,265
|
)
|
$
|
502,021
|
|||||||
U.S. Government agencies
|
$
|
114,259
|
$
|
-
|
$
|
(5,513
|
)
|
$
|
108,746
|
|||||||
Collateralized mortgage obligations
|
254,746
|
31
|
(7,775
|
)
|
247,002
|
|||||||||||
Agency mortgage-backed securities
|
134,737
|
-
|
(6,491
|
)
|
128,246
|
|||||||||||
Total securities held to maturity
|
$
|
503,742
|
$
|
31
|
$
|
(19,779
|
)
|
$
|
483,994
|
At December 31, 2017
|
||||||||||||||||
(dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Collateralized mortgage obligations
|
$
|
327,972
|
$
|
-
|
$
|
(7,731
|
)
|
$
|
320,241
|
|||||||
Agency mortgage-backed securities
|
55,664
|
2
|
(800
|
)
|
54,866
|
|||||||||||
Municipal securities
|
15,142
|
20
|
(62
|
)
|
15,100
|
|||||||||||
Corporate bonds
|
62,670
|
103
|
(2,491
|
)
|
60,282
|
|||||||||||
Asset-backed securities
|
13,414
|
38
|
-
|
13,452
|
||||||||||||
Trust preferred securities
|
725
|
-
|
(236
|
)
|
489
|
|||||||||||
Total securities available for sale
|
$
|
475,587
|
$
|
163
|
$
|
(11,320
|
)
|
$
|
464,430
|
|||||||
U.S. Government agencies
|
$
|
112,605
|
$
|
50
|
$
|
(2,235
|
)
|
$
|
110,420
|
|||||||
Collateralized mortgage obligations
|
215,567
|
314
|
(3,970
|
)
|
211,911
|
|||||||||||
Agency mortgage-backed securities
|
143,041
|
47
|
(2,620
|
)
|
140,468
|
|||||||||||
Other securities
|
1,000
|
-
|
-
|
1,000
|
||||||||||||
Total securities held to maturity
|
$
|
472,213
|
$
|
411
|
$
|
(8,825
|
)
|
$
|
463,799
|
Available for Sale
|
Held to Maturity
|
|||||||||||||||
(dollars in thousands)
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
||||||||||||
Due in 1 year or less
|
$
|
2,920
|
$
|
2,920
|
$
|
-
|
$
|
-
|
||||||||
After 1 year to 5 years
|
6,902
|
6,880
|
15,774
|
15,400
|
||||||||||||
After 5 years to 10 years
|
74,320
|
70,685
|
98,485
|
93,346
|
||||||||||||
After 10 years
|
5,233
|
5,212
|
-
|
-
|
||||||||||||
Collateralized mortgage obligations
|
361,142
|
346,942
|
254,746
|
247,002
|
||||||||||||
Agency mortgage-backed securities
|
71,668
|
69,382
|
134,737
|
128,246
|
||||||||||||
Total
|
$
|
522,185
|
$
|
502,021
|
$
|
503,742
|
$
|
483,994
|
(dollars in thousands)
|
2018
|
2017
|
||||||
Beginning Balance, January 1
st
|
$
|
274
|
$
|
937
|
||||
Additional credit-related impairment loss on securities for which an
|
||||||||
other-than-temporary impairment was previously recognized
|
-
|
-
|
||||||
Reductions for securities sold during the period
|
-
|
(483
|
)
|
|||||
Ending Balance, June 30
th
|
$
|
274
|
$
|
454
|
At June 30, 2018
|
||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
(dollars in thousands)
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
Collateralized mortgage obligations
|
$
|
185,402
|
$
|
5,287
|
$
|
161,540
|
$
|
8,913
|
$
|
346,942
|
$
|
14,200
|
||||||||||||
Agency mortgage-backed securities
|
44,035
|
1,134
|
21,087
|
1,153
|
65,122
|
2,287
|
||||||||||||||||||
Municipal securities
|
13,384
|
319
|
2,540
|
151
|
15,924
|
470
|
||||||||||||||||||
Corporate bonds
|
1,627
|
2
|
51,896
|
3,104
|
53,523
|
3,106
|
||||||||||||||||||
Asset backed securities
|
6,958
|
24
|
-
|
-
|
6,958
|
24
|
||||||||||||||||||
Trust preferred securities
|
-
|
-
|
547
|
178
|
547
|
178
|
||||||||||||||||||
Total Available for Sale
|
$
|
251,406
|
$
|
6,766
|
$
|
237,610
|
$
|
13,499
|
$
|
489,016
|
$
|
20,265
|
At June 30, 2018
|
||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
(dollars in thousands)
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
U.S. Government agencies
|
$
|
53,366
|
$
|
1,772
|
$
|
55,380
|
$
|
3,741
|
$
|
108,746
|
$
|
5,513
|
||||||||||||
Collateralized mortgage obligations
|
127,961
|
2,607
|
114,305
|
5,168
|
242,266
|
7,775
|
||||||||||||||||||
Agency mortgage-backed securities
|
52,667
|
1,975
|
75.579
|
4,516
|
128.246
|
6,491
|
||||||||||||||||||
Total Held to Maturity
|
$
|
233,994
|
$
|
6,354
|
$
|
245,264
|
$
|
13,425
|
$
|
479,258
|
$
|
19,779
|
At December 31, 2017
|
||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
(dollars in thousands)
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
Collateralized mortgage obligations
|
$
|
150,075
|
$
|
1,565
|
$
|
170,166
|
$
|
6,166
|
$
|
320,241
|
$
|
7,731
|
||||||||||||
Agency mortgage-backed securities
|
29,967
|
226
|
21,045
|
574
|
51,012
|
800
|
||||||||||||||||||
Municipal securities
|
5,742
|
27
|
2,656
|
35
|
8,398
|
62
|
||||||||||||||||||
Corporate bonds
|
-
|
-
|
52,509
|
2,491
|
52,509
|
2,491
|
||||||||||||||||||
Asset backed securities
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Trust preferred securities
|
-
|
-
|
489
|
236
|
489
|
236
|
||||||||||||||||||
Total Available for Sale
|
$
|
185,784
|
$
|
1,818
|
$
|
246,865
|
$
|
9,502
|
$
|
432,649
|
$
|
11,320
|
At December 31, 2017
|
||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
(dollars in thousands)
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
U.S. Government agencies
|
$
|
42,045
|
$
|
213
|
$
|
59,594
|
$
|
2,022
|
$
|
101,639
|
$
|
2,235
|
||||||||||||
Collateralized mortgage obligations
|
56,955
|
767
|
107,986
|
3,203
|
164,941
|
3,970
|
||||||||||||||||||
Agency mortgage-backed securities
|
55,170
|
221
|
82,479
|
2,399
|
137,649
|
2,620
|
||||||||||||||||||
Total Held to Maturity
|
$
|
154,170
|
$
|
1,201
|
$
|
250,059
|
$
|
7,624
|
$
|
404,229
|
$
|
8,825
|
(dollars in thousands)
|
Class /
Tranche
|
Amortized
Cost
|
Fair
Value
|
Unrealized Losses
|
Lowest
Credit
Rating Assigned
|
Number of Banks Currently Performing
|
Deferrals / Defaults
as % of Current Balance
|
Conditional Default
Rates for 2018 and beyond
|
Cumulative OTTI Life to Date
|
|||||||||||||||||||
TPREF Funding II
|
Class B Notes
|
$
|
725
|
$
|
547
|
$
|
(178
|
)
|
C
|
19
|
26%
|
|
0.33%
|
|
$
|
274
|
(dollars in thousands)
|
June 30,
2018
|
December 31,
2017
|
||||||
Commercial real estate
|
$
|
489,574
|
$
|
433,304
|
||||
Construction and land development
|
120,165
|
104,617
|
||||||
Commercial and industrial
|
188,254
|
173,343
|
||||||
Owner occupied real estate
|
335,871
|
309,838
|
||||||
Consumer and other
|
83,467
|
76,183
|
||||||
Residential mortgage
|
100,108
|
64,764
|
||||||
Total loans receivable
|
1,317,439
|
1,162,049
|
||||||
Deferred costs (fees)
|
139
|
229
|
||||||
Allowance for loan losses
|
(7,566
|
)
|
(8,599
|
)
|
||||
Net loans receivable
|
$
|
1,310,012
|
$
|
1,153,679
|
(dollars in thousands)
|
Commercial Real Estate
|
Construction and Land Development
|
Commercial and Industrial
|
Owner Occupied Real Estate
|
Consumer and Other
|
Residential Mortgage
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Three months ended June 30, 2018
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance:
|
$
|
1,903
|
$
|
751
|
$
|
1,261
|
$
|
1,692
|
$
|
460
|
$
|
508
|
$
|
75
|
$
|
6,650
|
||||||||||||||||
Charge-offs
|
-
|
-
|
-
|
-
|
(14
|
)
|
-
|
-
|
(14
|
)
|
||||||||||||||||||||||
Recoveries
|
33
|
-
|
76
|
20
|
1
|
-
|
-
|
130
|
||||||||||||||||||||||||
Provisions (credits)
|
103
|
21
|
112
|
144
|
62
|
130
|
228
|
800
|
||||||||||||||||||||||||
Ending balance
|
$
|
2,039
|
$
|
772
|
$
|
1,449
|
$
|
1,856
|
$
|
509
|
$
|
638
|
$
|
303
|
$
|
7,566
|
||||||||||||||||
Three months ended June 30, 2017 Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance:
|
$
|
2,962
|
$
|
546
|
$
|
2,770
|
$
|
1,627
|
$
|
575
|
$
|
130
|
$
|
571
|
$
|
9,181
|
||||||||||||||||
Charge-offs
|
-
|
-
|
(152
|
)
|
(100
|
)
|
(6
|
)
|
-
|
-
|
(258
|
)
|
||||||||||||||||||||
Recoveries
|
-
|
-
|
30
|
-
|
1
|
-
|
-
|
31
|
||||||||||||||||||||||||
Provisions (credits)
|
209
|
34
|
(152
|
)
|
71
|
(26
|
)
|
108
|
256
|
500
|
||||||||||||||||||||||
Ending balance
|
$
|
3,171
|
$
|
580
|
$
|
2,496
|
$
|
1,598
|
$
|
544
|
$
|
238
|
$
|
827
|
$
|
9,454
|
(dollars in thousands)
|
Commercial Real Estate
|
Construction and Land Development
|
Commercial and Industrial
|
Owner Occupied Real Estate
|
Consumer and Other
|
Residential Mortgage
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Six months ended June 30, 2018 Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance:
|
$
|
3,774
|
$
|
725
|
$
|
1,317
|
$
|
1,737
|
$
|
573
|
$
|
392
|
$
|
81
|
$
|
8,599
|
||||||||||||||||
Charge-offs
|
(1,535
|
)
|
-
|
(151
|
)
|
(465
|
)
|
(212
|
)
|
-
|
-
|
(2,363
|
)
|
|||||||||||||||||||
Recoveries
|
33
|
-
|
76
|
20
|
1
|
-
|
-
|
130
|
||||||||||||||||||||||||
Provisions (credits)
|
(233
|
)
|
47
|
207
|
564
|
147
|
246
|
222
|
1,200
|
|||||||||||||||||||||||
Ending balance
|
$
|
2,039
|
$
|
772
|
$
|
1,449
|
$
|
1,856
|
$
|
509
|
$
|
638
|
$
|
303
|
$
|
7,566
|
||||||||||||||||
Six months ended June 30, 2017 Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Beginning balance:
|
$
|
3,254
|
$
|
557
|
$
|
2,884
|
$
|
1,382
|
$
|
588
|
$
|
58
|
$
|
432
|
$
|
9,155
|
||||||||||||||||
Charge-offs
|
-
|
-
|
(152
|
)
|
(108
|
)
|
(8
|
)
|
-
|
-
|
(268
|
)
|
||||||||||||||||||||
Recoveries
|
7
|
-
|
59
|
-
|
1
|
-
|
-
|
67
|
||||||||||||||||||||||||
Provisions (credits)
|
(90
|
)
|
23
|
(295
|
)
|
324
|
(37
|
)
|
180
|
395
|
500
|
|||||||||||||||||||||
Ending balance
|
$
|
3,171
|
$
|
580
|
$
|
2,496
|
$
|
1,598
|
$
|
544
|
$
|
238
|
$
|
827
|
$
|
9,454
|
(dollars in thousands)
|
Commercial Real Estate
|
Construction and Land Development
|
Commercial and Industrial
|
Owner Occupied Real Estate
|
Consumer and Other
|
Residential Mortgage
|
Unallocated
|
Total
|
||||||||||||||||||||||||
June 30, 2018
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
-
|
$
|
-
|
$
|
622
|
$
|
201
|
$
|
68
|
$
|
-
|
$
|
-
|
$
|
891
|
||||||||||||||||
Collectively evaluated for impairment
|
2,039
|
772
|
827
|
1,655
|
441
|
638
|
303
|
6,675
|
||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
2,039
|
$
|
772
|
$
|
1,449
|
$
|
1,856
|
$
|
509
|
$
|
638
|
$
|
303
|
$
|
7,566
|
||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||||||
Loans evaluated individually
|
$
|
13,811
|
$
|
-
|
$
|
6,783
|
$
|
3,400
|
$
|
790
|
$
|
-
|
$
|
-
|
$
|
24,784
|
||||||||||||||||
Loans evaluated collectively
|
475,763
|
120,165
|
181,471
|
332,471
|
82,677
|
100,108
|
-
|
1,292,655
|
||||||||||||||||||||||||
Total loans receivable
|
$
|
489,574
|
$
|
120,165
|
$
|
188,254
|
$
|
335,871
|
$
|
83,467
|
$
|
100,108
|
$
|
-
|
$
|
1,317,439
|
(dollars in thousands)
|
Commercial Real Estate
|
Construction and Land Development
|
Commercial and Industrial
|
Owner Occupied Real Estate
|
Consumer and Other
|
Residential Mortgage
|
Unallocated
|
Total
|
||||||||||||||||||||||||
December 31, 2017
|
||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
1,964
|
$
|
-
|
$
|
374
|
$
|
235
|
$
|
217
|
$
|
-
|
$
|
-
|
$
|
2,790
|
||||||||||||||||
Collectively evaluated for impairment
|
1,810
|
725
|
943
|
1,502
|
356
|
392
|
81
|
5,809
|
||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
3,774
|
$
|
725
|
$
|
1,317
|
$
|
1,737
|
$
|
573
|
$
|
392
|
$
|
81
|
$
|
8,599
|
||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||||||
Loans evaluated individually
|
$
|
15,415
|
$
|
-
|
$
|
4,501
|
$
|
3,798
|
$
|
1,002
|
$
|
-
|
$
|
-
|
$
|
24,716
|
||||||||||||||||
Loans evaluated collectively
|
417,889
|
104,617
|
168,842
|
306,040
|
75,181
|
64,764
|
-
|
1,137,333
|
||||||||||||||||||||||||
Total loans receivable
|
$
|
433,304
|
$
|
104,617
|
$
|
173,343
|
$
|
309,838
|
$
|
76,183
|
$
|
64,764
|
$
|
-
|
$
|
1,162,049
|
June 30, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
(dollars in thousands)
|
Recorded Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Recorded Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
13,811
|
$
|
14,699
|
$
|
-
|
$
|
9,264
|
$
|
9,268
|
$
|
-
|
||||||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Commercial and industrial
|
4,818
|
8,618
|
-
|
2,756
|
6,674
|
-
|
||||||||||||||||||
Owner occupied real estate
|
2,093
|
2,241
|
-
|
2,595
|
2,743
|
-
|
||||||||||||||||||
Consumer and other
|
638
|
986
|
-
|
655
|
981
|
-
|
||||||||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
21,360
|
$
|
26,544
|
$
|
-
|
$
|
15,270
|
$
|
19,666
|
$
|
-
|
With an allowance recorded:
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
6,151
|
$
|
6,165
|
$
|
1,964
|
||||||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Commercial and industrial
|
1,965
|
2,107
|
622
|
1,745
|
1,752
|
374
|
||||||||||||||||||
Owner occupied real estate
|
1,307
|
1,314
|
201
|
1,203
|
1,206
|
235
|
||||||||||||||||||
Consumer and other
|
152
|
153
|
68
|
347
|
379
|
217
|
||||||||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
3,424
|
$
|
3,574
|
$
|
891
|
$
|
9,446
|
$
|
9,502
|
$
|
2,790
|
Total:
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
13,811
|
$
|
14,699
|
$
|
-
|
$
|
15,415
|
$
|
15,433
|
$
|
1,964
|
||||||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Commercial and industrial
|
6,783
|
10,725
|
622
|
4,501
|
8,426
|
374
|
||||||||||||||||||
Owner occupied real estate
|
3,400
|
3,555
|
201
|
3,798
|
3,949
|
235
|
||||||||||||||||||
Consumer and other
|
790
|
1,139
|
68
|
1,002
|
1,360
|
217
|
||||||||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
24,784
|
$
|
30,118
|
$
|
891
|
$
|
24,716
|
$
|
29,168
|
$
|
2,790
|
Three Months Ended June 30,
|
|||||||||||||||||
2018
|
2017
|
||||||||||||||||
(dollars in thousands)
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||||||||
With no related allowance recorded:
|
|||||||||||||||||
Commercial real estate
|
$
|
13,828
|
$
|
72
|
$
|
8,794
|
$
|
95
|
|||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
|||||||||||||
Commercial and industrial
|
5,162
|
28
|
2,139
|
10
|
|||||||||||||
Owner occupied real estate
|
2,338
|
14
|
1,812
|
17
|
|||||||||||||
Consumer and other
|
639
|
1
|
868
|
5
|
|||||||||||||
Residential mortgage
|
-
|
-
|
21
|
-
|
|||||||||||||
Total
|
$
|
21,967
|
$
|
115
|
$
|
13,634
|
$
|
127
|
With an allowance recorded:
|
||||||||||||||||
Commercial real estate
|
$
|
-
|
$
|
-
|
$
|
6,515
|
$
|
4
|
||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial and industrial
|
1,774
|
-
|
3,015
|
17
|
||||||||||||
Owner occupied real estate
|
1,075
|
6
|
1,380
|
8
|
||||||||||||
Consumer and other
|
152
|
-
|
407
|
2
|
||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
$
|
3,001
|
$
|
6
|
$
|
11,317
|
$
|
31
|
Total:
|
||||||||||||||||
Commercial real estate
|
$
|
13,828
|
$
|
72
|
$
|
15,309
|
$
|
99
|
||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial and industrial
|
6.936
|
28
|
5,154
|
27
|
||||||||||||
Owner occupied real estate
|
3,413
|
20
|
3,192
|
25
|
||||||||||||
Consumer and other
|
791
|
1
|
1,275
|
7
|
||||||||||||
Residential mortgage
|
-
|
-
|
21
|
-
|
||||||||||||
Total
|
$
|
24,968
|
$
|
121
|
$
|
24,951
|
$
|
158
|
Six Months Ended June 30,
|
||||||||||||||||
2018
|
2017
|
|||||||||||||||
(dollars in thousands)
|
Average Recorded Investment
|
Interest
Income Recognized
|
Average Recorded Investment
|
Interest
Income Recognized
|
||||||||||||
With no related allowance recorded:
|
||||||||||||||||
Commercial real estate
|
$
|
12,307
|
$
|
144
|
$
|
10,542
|
$
|
165
|
||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial and industrial
|
4,360
|
33
|
2,035
|
18
|
||||||||||||
Owner occupied real estate
|
2,423
|
28
|
1,469
|
29
|
||||||||||||
Consumer and other
|
644
|
2
|
810
|
8
|
||||||||||||
Residential mortgage
|
-
|
-
|
43
|
1
|
||||||||||||
Total
|
$
|
19,734
|
$
|
207
|
$
|
14,899
|
$
|
221
|
With an allowance recorded:
|
||||||||||||||||
Commercial real estate
|
$
|
2,050
|
$
|
-
|
$
|
6,637
|
$
|
9
|
||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial and industrial
|
1,765
|
3
|
3,159
|
34
|
||||||||||||
Owner occupied real estate
|
1,118
|
12
|
1,577
|
14
|
||||||||||||
Consumer and other
|
217
|
1
|
468
|
6
|
||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
$
|
5,150
|
$
|
16
|
$
|
11,841
|
$
|
63
|
Total:
|
||||||||||||||||
Commercial real estate
|
$
|
14,357
|
$
|
144
|
$
|
17,179
|
$
|
174
|
||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial and industrial
|
6,125
|
36
|
5,194
|
52
|
||||||||||||
Owner occupied real estate
|
3,541
|
40
|
3,046
|
43
|
||||||||||||
Consumer and other
|
861
|
3
|
1,278
|
14
|
||||||||||||
Residential mortgage
|
-
|
-
|
43
|
1
|
||||||||||||
Total
|
$
|
24,884
|
$
|
223
|
$
|
26,740
|
$
|
284
|
(dollars in thousands)
|
30-59
Days Past
Due
|
60-89
Days Past
Due
|
Greater
than 90
Days
|
Total
Past
Due
|
Current
|
Total
Loans
Receivable
|
Loans
Receivable >
90 Days and Accruing
|
|||||||||||||||||||||
At June 30, 2018
|
||||||||||||||||||||||||||||
Commercial real estate
|
$
|
815
|
$
|
129
|
$
|
7,426
|
$
|
8,370
|
$
|
481,204
|
$
|
489,574
|
$
|
-
|
||||||||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
120,165
|
120,165
|
-
|
|||||||||||||||||||||
Commercial and industrial
|
-
|
-
|
3,885
|
3,885
|
184,369
|
188,254
|
-
|
|||||||||||||||||||||
Owner occupied real estate
|
-
|
-
|
2,004
|
2,004
|
333,867
|
335,871
|
-
|
|||||||||||||||||||||
Consumer and other
|
12
|
-
|
791
|
803
|
82,664
|
83,467
|
-
|
|||||||||||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
100,108
|
100,108
|
-
|
|||||||||||||||||||||
Total
|
$
|
827
|
$
|
129
|
$
|
14,106
|
$
|
15,062
|
$
|
1,302,377
|
$
|
1,317,439
|
$
|
-
|
||||||||||||||
(dollars in thousands)
|
30-59
Days Past
Due
|
60-89
Days Past
Due
|
Greater
than 90
Days
|
Total
Past Due
|
Current
|
Total
Loans
Receivable
|
Loans
Receivable >
90 Days and Accruing
|
|||||||||||||||||||||
At December 31, 2017
|
||||||||||||||||||||||||||||
Commercial real estate
|
$
|
-
|
$
|
-
|
$
|
8,963
|
$
|
8,963
|
$
|
424,341
|
$
|
433,304
|
$
|
-
|
||||||||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
104,617
|
104,617
|
-
|
|||||||||||||||||||||
Commercial and industrial
|
969
|
-
|
2,895
|
3,864
|
169,479
|
173,343
|
-
|
|||||||||||||||||||||
Owner occupied real estate
|
-
|
-
|
2,136
|
2,136
|
307,702
|
309,838
|
-
|
|||||||||||||||||||||
Consumer and other
|
144
|
-
|
851
|
995
|
75,188
|
76,183
|
-
|
|||||||||||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
64,764
|
64,764
|
-
|
|||||||||||||||||||||
Total
|
$
|
1,113
|
$
|
-
|
$
|
14,845
|
$
|
15,958
|
$
|
1,146,091
|
$
|
1,162,049
|
$
|
-
|
(dollars in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
At June 30, 2018:
|
||||||||||||||||||||
Commercial real estate
|
$
|
481.204
|
$
|
944
|
$
|
7,426
|
$
|
-
|
$
|
489,574
|
||||||||||
Construction and land development
|
120,165
|
-
|
-
|
-
|
120,165
|
|||||||||||||||
Commercial and industrial
|
181,452
|
19
|
6,503
|
280
|
188,254
|
|||||||||||||||
Owner occupied real estate
|
331,121
|
1,350
|
3,400
|
-
|
335,871
|
|||||||||||||||
Consumer and other
|
82,677
|
-
|
790
|
-
|
83,467
|
|||||||||||||||
Residential mortgage
|
99,983
|
125
|
-
|
-
|
100,108
|
|||||||||||||||
Total
|
$
|
1,296,602
|
$
|
2,438
|
$
|
18,119
|
$
|
280
|
$
|
1,317,439
|
(dollars in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
At December 31, 2017:
|
||||||||||||||||||||
Commercial real estate
|
$
|
423,382
|
$
|
959
|
$
|
8,963
|
$
|
-
|
$
|
433,304
|
||||||||||
Construction and land development
|
104,617
|
-
|
-
|
-
|
104,617
|
|||||||||||||||
Commercial and industrial
|
168,702
|
140
|
4,221
|
280
|
173,343
|
|||||||||||||||
Owner occupied real estate
|
306,040
|
-
|
3,798
|
-
|
309,838
|
|||||||||||||||
Consumer and other
|
75,181
|
-
|
1,002
|
-
|
76,183
|
|||||||||||||||
Residential mortgage
|
64,637
|
127
|
-
|
-
|
64,764
|
|||||||||||||||
Total
|
$
|
1,142,559
|
$
|
1,226
|
$
|
17,984
|
$
|
280
|
$
|
1,162,049
|
(dollars in thousands)
|
June 30,
2018
|
December 31,
2017
|
||||||
Commercial real estate
|
$
|
7,426
|
$
|
8,963
|
||||
Construction and land development
|
-
|
-
|
||||||
Commercial and industrial
|
3,885
|
2,895
|
||||||
Owner occupied real estate
|
2,004
|
2,136
|
||||||
Consumer and other
|
791
|
851
|
||||||
Residential mortgage
|
-
|
-
|
||||||
Total
|
$
|
14,106
|
$
|
14,845
|
(dollars in thousands)
|
Number
of Loans
|
Accrual
Status
|
Non-
Accrual
Status
|
Total
TDRs
|
||||||||||||
June 30, 2018
|
||||||||||||||||
Commercial real estate
|
1
|
$
|
6,384
|
$
|
-
|
$
|
6,384
|
|||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial and industrial
|
3
|
-
|
1,524
|
1,524
|
||||||||||||
Owner occupied real estate
|
1
|
-
|
242
|
242
|
||||||||||||
Consumer and other
|
-
|
-
|
-
|
-
|
||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
5
|
$
|
6,384
|
$
|
1,766
|
$
|
8,150
|
|||||||||
December 31, 2017
|
||||||||||||||||
Commercial real estate
|
1
|
$
|
6,452
|
$
|
-
|
$
|
6,452
|
|||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial and industrial
|
3
|
1,175
|
349
|
1,524
|
||||||||||||
Owner occupied real estate
|
1
|
242
|
-
|
242
|
||||||||||||
Consumer and other
|
-
|
-
|
-
|
-
|
||||||||||||
Residential mortgage
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
5
|
$
|
7,869
|
$
|
349
|
$
|
8,218
|
Three Months Ended
June 30,
|
||||||||
(dollars in thousands)
|
2018
|
2017
|
||||||
Beginning balance, April 1st
|
$
|
5,059
|
$
|
5,298
|
||||
Additions
|
247
|
267
|
||||||
Fair value adjustments
|
(329
|
)
|
(371
|
)
|
||||
Ending balance, June 30th
|
$
|
4,977
|
$
|
5,194
|
Six Months Ended
June 30,
|
||||||||
(dollars in thousands)
|
2018
|
2017
|
||||||
Beginning balance, January 1st
|
$
|
5,243
|
$
|
5,352
|
||||
Additions
|
567
|
478
|
||||||
Fair value adjustments
|
(833
|
)
|
(636
|
)
|
||||
Ending balance, June 30th
|
$
|
4,977
|
$
|
5,194
|
Three Months Ended
June 30, 2018
|
Three Months Ended
June 30, 2017
|
|||||||||||||||
Level 3 Investments Only
(dollars in thousands)
|
Trust Preferred Securities
|
Corporate
Bonds
|
Trust Preferred Securities
|
Corporate
Bonds
|
||||||||||||
Balance, April 1
st
|
$
|
561
|
$
|
3,090
|
$
|
1,961
|
$
|
3,024
|
||||||||
Unrealized gains (losses)
|
(14
|
)
|
(7
|
)
|
525
|
55
|
||||||||||
Proceeds from sales
|
-
|
-
|
(970
|
)
|
-
|
|||||||||||
Realized losses
|
-
|
-
|
(548
|
)
|
-
|
|||||||||||
Balance, June 30
th
|
$
|
547
|
$
|
3,083
|
$
|
968
|
$
|
3,079
|
Six Months Ended
June 30, 2018
|
Six Months Ended
June 30, 2017
|
|||||||||||||||
Level 3 Investments Only
(dollars in thousands)
|
Trust Preferred Securities
|
Corporate
Bonds
|
Trust Preferred Securities
|
Corporate
Bonds
|
||||||||||||
Balance, January 1
st
|
$
|
489
|
$
|
3,086
|
$
|
1,820
|
$
|
2,971
|
||||||||
Unrealized gains (losses)
|
58
|
(3
|
)
|
666
|
108
|
|||||||||||
Proceeds from sales
|
-
|
-
|
(970
|
)
|
-
|
|||||||||||
Realized losses
|
-
|
-
|
(548
|
)
|
-
|
|||||||||||
Balance, June 30
th
|
$
|
547
|
$
|
3,083
|
$
|
968
|
$
|
3,079
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
Asset Description
|
Fair Value
|
Valuation Technique
|
Unobservable Input
|
Range (Weighted Average)
|
|||||
June 30, 2018
|
|||||||||
Corporate bonds
|
$
|
3,083
|
Discounted
Cash Flows
|
Discount Rate
|
(7.32%)
|
||||
Trust preferred securities
|
$
|
547
|
Discounted
Cash Flows
|
Discount Rate
|
(8.06%)
|
||||
SBA servicing assets
|
$
|
4,977
|
Discounted
Cash Flows
|
Conditional
Prepayment Rate
Discount Rate
|
(9.88%)
(11.00%)
|
||||
Impaired loans
|
$
|
7,149
|
Appraised Value of Collateral (1)
|
Liquidation expenses (2)
|
10% - 30% (13%) (3)
|
||||
December 31, 2017
|
|||||||||
Corporate bonds
|
$
|
3,086
|
Discounted
Cash Flows
|
Discount Rate
|
(5.99%)
|
||||
Trust preferred securities
|
$
|
489
|
Discounted
Cash Flows
|
Discount Rate
|
(8.33%)
|
||||
SBA servicing assets
|
$
|
5,243
|
Discounted
Cash Flows
|
Conditional
Prepayment Rate
Discount Rate
|
(7.85%)
(10.50%)
|
||||
Impaired loans
|
$
|
7,322
|
Appraised Value of Collateral (1)
|
Liquidation expenses (2)
|
10% - 21% (14%) (3)
|
||||
Other real estate owned
|
$
|
5,727
|
Appraised Value of Collateral (1)
Sales Price
|
Liquidation expenses (2)
Liquidation expenses (2)
|
(22%) (3)
4% - 7% (7%) (3)
|
(1)
|
Fair value is generally determined through independent appraisals of the underlying collateral, which include Level 3 inputs that are not identifiable.
|
(2)
|
Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
|
(3)
|
The range and weighted average of qualitative factors such as economic conditions and estimated liquidation expenses are presented as a percent of the appraised value.
|
Carrying
Amount
|
Aggregate Unpaid
Principal Balance
|
Excess Carrying
Amount Over
Aggregate Unpaid
Principal Balance
|
||||||
June 30, 2018
|
$
|
36,090
|
$
|
34,802
|
$
|
1,288
|
||
December 31, 2017
|
$
|
43,375
|
$
|
42,046
|
$
|
1,329
|
(dollars in thousands)
|
June 30, 2018
|
December 31, 2017
|
||||||
SBA Servicing Asset
|
||||||||
Fair Value of SBA Servicing Asset
|
$
|
4,977
|
$
|
5,243
|
||||
Composition of SBA Loans Serviced for Others
|
||||||||
Fixed-rate SBA loans
|
2
|
%
|
2
|
%
|
||||
Adjustable-rate SBA loans
|
98
|
%
|
98
|
%
|
||||
Total
|
100
|
%
|
100
|
%
|
||||
Weighted Average Remaining Term
|
20.4 years
|
20.5 years
|
||||||
Prepayment Speed
|
9.88
|
%
|
7.85
|
%
|
||||
Effect on fair value of a 10% increase
|
$
|
(174
|
)
|
$
|
(171
|
)
|
||
Effect on fair value of a 20% increase
|
(338
|
)
|
(333
|
)
|
||||
Weighted Average Discount Rate
|
11.00
|
%
|
10.50
|
%
|
||||
Effect on fair value of a 10% increase
|
$
|
(191
|
)
|
$
|
(211
|
)
|
||
Effect on fair value of a 20% increase
|
(369
|
)
|
(407
|
)
|
Fair Value Measurements at June 30, 2018
|
||||||||||||||||||||
(dollars in thousands)
|
Carrying Amount
|
Fair
Value
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant Unobservable
Inputs
(Level 3)
|
|||||||||||||||
Balance Sheet Data
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
59,354
|
$
|
59,354
|
$
|
59,354
|
$
|
-
|
$
|
-
|
||||||||||
Investment securities available for sale
|
502,021
|
502,021
|
-
|
498,391
|
3,630
|
|||||||||||||||
Investment securities held to maturity
|
503,742
|
483,994
|
-
|
483,994
|
-
|
|||||||||||||||
Restricted stock
|
8,379
|
8,379
|
-
|
8,379
|
-
|
|||||||||||||||
Loans held for sale
|
39,301
|
39,301
|
-
|
36,090
|
3,211
|
|||||||||||||||
Loans receivable, net
|
1,310,012
|
1,283,864
|
-
|
-
|
1,283,864
|
|||||||||||||||
SBA servicing assets
|
4,977
|
4,977
|
-
|
-
|
4,977
|
|||||||||||||||
Accrued interest receivable
|
8,019
|
8,019
|
-
|
8,019
|
-
|
|||||||||||||||
Interest rate lock commitments
|
714
|
714
|
-
|
714
|
-
|
|||||||||||||||
Best efforts forward loan sales commitments
|
1
|
1
|
-
|
1
|
-
|
|||||||||||||||
Mandatory forward loan sales commitments
|
6
|
6
|
-
|
6
|
-
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
||||||||||||||||||||
Demand, savings and money market
|
$
|
2,010,345
|
$
|
2,010,345
|
$
|
-
|
$
|
2,010,345
|
$
|
-
|
||||||||||
Time
|
123,796
|
122,287
|
-
|
122,287
|
-
|
|||||||||||||||
Short-term borrowings
|
161,669
|
161,669
|
-
|
161,669
|
-
|
|||||||||||||||
Subordinated debt
|
11,256
|
8,501
|
-
|
-
|
8,501
|
|||||||||||||||
Accrued interest payable
|
408
|
408
|
-
|
408
|
-
|
|||||||||||||||
Interest rate lock commitments
|
3
|
3
|
-
|
3
|
-
|
|||||||||||||||
Best efforts forward loan sales commitments
|
210
|
210
|
-
|
210
|
-
|
|||||||||||||||
Mandatory forward loan sales commitments
|
301
|
301
|
-
|
301
|
-
|
|||||||||||||||
Off-Balance Sheet Data
|
||||||||||||||||||||
Commitments to extend credit
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Standby letters-of-credit
|
-
|
-
|
-
|
-
|
-
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||||||
(dollars in thousands)
|
Carrying
Amount
|
Fair
Value
|
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant Unobservable
Inputs
(Level 3)
|
|||||||||||||||
Balance Sheet Data
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
61,942
|
$
|
61,942
|
$
|
61,942
|
$
|
-
|
$
|
-
|
||||||||||
Investment securities available for sale
|
464,430
|
464,430
|
-
|
460,855
|
3,575
|
|||||||||||||||
Investment securities held to maturity
|
472,213
|
463,799
|
-
|
463,799
|
-
|
|||||||||||||||
Restricted stock
|
1,918
|
1,918
|
-
|
1,918
|
-
|
|||||||||||||||
Loans held for sale
|
45,700
|
45,714
|
-
|
43,375
|
2,339
|
|||||||||||||||
Loans receivable, net
|
1,153,679
|
1,120,305
|
-
|
-
|
1,120,305
|
|||||||||||||||
SBA servicing assets
|
5,243
|
5,243
|
-
|
-
|
5,243
|
|||||||||||||||
Accrued interest receivable
|
7,009
|
7,009
|
-
|
7,009
|
-
|
|||||||||||||||
Interest rate lock commitments
|
363
|
363
|
-
|
363
|
-
|
|||||||||||||||
Best efforts forward loan sales commitments
|
5
|
5
|
-
|
5
|
-
|
|||||||||||||||
Mandatory forward loan sales commitments
|
19
|
19
|
-
|
19
|
-
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
||||||||||||||||||||
Demand, savings and money market
|
$
|
1,946,558
|
$
|
1,946,558
|
$
|
-
|
$
|
1,946,558
|
$
|
-
|
||||||||||
Time
|
116,737
|
115,673
|
-
|
115,673
|
-
|
|||||||||||||||
Subordinated debt
|
21,681
|
18,458
|
-
|
-
|
18,458
|
|||||||||||||||
Accrued interest payable
|
293
|
293
|
-
|
293
|
-
|
|||||||||||||||
Interest rate lock commitments
|
1
|
1
|
-
|
1
|
-
|
|||||||||||||||
Best efforts forward loan sales commitments
|
93
|
93
|
-
|
93
|
-
|
|||||||||||||||
Mandatory forward loan sales commitments
|
195
|
195
|
-
|
195
|
-
|
|||||||||||||||
Off-Balance Sheet Data
|
||||||||||||||||||||
Commitments to extend credit
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Standby letters-of-credit
|
-
|
-
|
-
|
-
|
-
|
Unrealized Gains (Losses) on Available-For-Sale Securities
|
Unrealized Holding Losses on Securities Transferred From Available-For-Sale To Held-To-Maturity
|
Total
|
||||||||||
(dollars in thousands)
|
||||||||||||
Balance January 1, 2018
|
$
|
(7,150
|
)
|
$
|
(359
|
)
|
$
|
(7,509
|
)
|
|||
Reclassification due to the adoption of
ASU 2018-02
|
(1,562
|
)
|
(78
|
)
|
(1,640
|
)
|
||||||
Unrealized loss on securities
|
(7,036
|
)
|
-
|
(7,036
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive income to
net income (2)
|
1
|
54
|
55
|
|||||||||
Net current-period other comprehensive income (loss)
|
(7,035
|
)
|
54
|
(6,981
|
)
|
|||||||
Balance June 30, 2018
|
$
|
(15,747
|
)
|
$
|
(383
|
)
|
$
|
(16,130
|
)
|
|||
Balance January 1, 2017
|
$
|
(6,831
|
)
|
$
|
(463
|
)
|
$
|
(7,294
|
)
|
|||
Unrealized gain on securities
|
1,681
|
-
|
1,681
|
|||||||||
Amounts reclassified from accumulated other comprehensive income to
net income (2)
|
39
|
55
|
94
|
|||||||||
Net current-period other comprehensive income
|
1,720
|
55
|
1,775
|
|||||||||
Balance June 30, 2017
|
$
|
(5,111
|
)
|
$
|
(408
|
)
|
$
|
(5,519
|
)
|
|||
Balance January 1, 2017
|
$
|
(6,831
|
)
|
$
|
(463
|
)
|
$
|
(7,294
|
)
|
|||
Unrealized loss on securities
|
(413
|
)
|
-
|
(413
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive income to
net income (2)
|
94
|
104
|
198
|
|||||||||
Net current-period other comprehensive income (loss)
|
(319
|
)
|
104
|
(215
|
)
|
|||||||
Balance December 31, 2017
|
$
|
(7,150
|
)
|
$
|
(359
|
)
|
$
|
(7,509
|
)
|
(1) |
All amounts are net of tax. Amounts in parentheses indicate reductions to other comprehensive income.
|
(2) |
Reclassification amounts are reported as gains on sales of investment securities, impairment losses, and amortization of net unrealized losses on the Consolidated Statement of Operations.
|
(dollars in thousands)
|
Balance
December 31, 2017
|
Additions/
Adjustments
|
Amortization
|
Balance
June 30,
2018
|
Amortization Period
(in years)
|
||||||||||||
Goodwill
|
$
|
5,011
|
$
|
-
|
$
|
-
|
$
|
5,011
|
Indefinite
|
(dollars in thousands)
|
Balance
December 31, 2016
|
Additions/
Adjustments
|
Amortization
|
Balance
June 30,
2017
|
Amortization Period
(in years)
|
||||||||||||
Goodwill
|
$
|
5,011
|
$
|
-
|
$
|
-
|
$
|
5,011
|
Indefinite
|
||||||||
Non-compete agreements
|
61
|
-
|
(52)
|
9
|
1
|
||||||||||||
Total
|
$
|
5,072
|
$
|
-
|
$
|
(52)
|
$
|
5,020
|
June 30, 2018
|
Balance Sheet
Presentation
|
Fair
Value
|
Notional
Amount
|
||||||
Asset derivatives:
|
|||||||||
IRLC's
|
Other Assets
|
$
|
714
|
$
|
32,937
|
||||
Best efforts forward loan sales commitments
|
Other Assets
|
1
|
363
|
||||||
Mandatory forward loan sales commitments
|
Other Assets
|
6
|
1,091
|
||||||
Liability derivatives:
|
|||||||||
IRLC's
|
Other Liabilities
|
$
|
3
|
$
|
687
|
||||
Best efforts forward loan sales commitments
|
Other Liabilities
|
210
|
33,261
|
||||||
Mandatory forward loan sales commitments
|
Other Liabilities
|
301
|
33,168
|
December 31, 2017
|
Balance Sheet
Presentation
|
Fair
Value
|
Notional
Amount
|
||||||
Asset derivatives:
|
|||||||||
IRLCs
|
Other Assets
|
$
|
363
|
$
|
16,366
|
||||
Best efforts forward loan sales commitments
|
Other Assets
|
5
|
1,807
|
||||||
Mandatory forward loan sales commitments
|
Other Assets
|
19
|
4,566
|
||||||
Liability derivatives:
|
|||||||||
IRLCs
|
Other Liabilities
|
$
|
1
|
$
|
424
|
||||
Best efforts forward loan sales commitments
|
Other Liabilities
|
93
|
14,983
|
||||||
Mandatory forward loan sales commitments
|
Other Liabilities
|
195
|
36,223
|
Three Months Ended
June 30, 2018
|
Six Months Ended
June 30, 2018
|
||||||
Income Statement
Presentation
|
Gain/(Loss)
|
Gain/(Loss)
|
|||||
Asset derivatives:
|
|||||||
IRLC's
|
Mortgage banking income
|
$
|
80
|
$
|
351
|
||
Best efforts forward loan sales commitments
|
Mortgage banking income
|
(5)
|
(5)
|
||||
Mandatory forward loan sales commitments
|
Mortgage banking income
|
3
|
(13)
|
||||
Liability derivatives:
|
|||||||
IRLC's
|
Mortgage banking income
|
$
|
(1)
|
$
|
(1)
|
||
Best efforts forward loan sales commitments
|
Mortgage banking income
|
17
|
(118)
|
||||
Mandatory forward loan sales commitments
|
Mortgage banking income
|
(152)
|
(105)
|
Three Months Ended
June 30, 2017
|
Six Months Ended
June 30, 2017
|
||||||
Income Statement
Presentation
|
Gain/(Loss)
|
Gain/(Loss)
|
|||||
Asset derivatives:
|
|||||||
IRLC's
|
Mortgage banking income
|
$
|
(71)
|
$
|
321
|
||
Best efforts forward loan sales commitments
|
Mortgage banking income
|
18
|
(82)
|
||||
Mandatory forward loan sales commitments
|
Mortgage banking income
|
(4)
|
(225)
|
||||
Liability derivatives:
|
|||||||
IRLC's
|
Mortgage banking income
|
$
|
6
|
$
|
54
|
||
Best efforts forward loan sales commitments
|
Mortgage banking income
|
107
|
(38)
|
||||
Mandatory forward loan sales commitments
|
Mortgage banking income
|
(23)
|
(110)
|
Three Months Ended
June 30,
|
||||||||
(dollars in thousands)
|
2018
|
2017
|
||||||
Non-interest income
|
||||||||
In-scope of Topic 606
|
||||||||
Service charges on deposit accounts
|
$
|
1,326
|
$
|
907
|
||||
Other non-interest income
|
43
|
40
|
||||||
Non-interest income (in-scope of Topic 606)
|
1,369
|
947
|
||||||
Non-interest income (out-of-scope of Topic 606)
|
4,399
|
4,022
|
||||||
Total non-interest income
|
$
|
5,768
|
$
|
4,969
|
Six Months Ended
June 30,
|
||||||||
(dollars in thousands)
|
2018
|
2017
|
||||||
Non-interest income
|
||||||||
In-scope of Topic 606
|
||||||||
Service charges on deposit accounts
|
$
|
2,501
|
$
|
1,753
|
||||
Other non-interest income
|
78
|
86
|
||||||
Non-interest income (in-scope of Topic 606)
|
2,579
|
1,839
|
||||||
Non-interest income (out-of-scope of Topic 606)
|
7,724
|
7,468
|
||||||
Total non-interest income
|
$
|
10,303
|
$
|
9,307
|
For the three months ended
June 30, 2018
|
For the three months ended
June 30, 2017
|
|||||||||||||||||||||||
(dollars in thousands)
|
Average Balance
|
Interest
|
Yield/
Rate
(1)
|
Average Balance
|
Interest
|
Yield/
Rate
(1)
|
||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Federal funds sold and other interest-earning assets
|
$
|
13,412
|
$
|
63
|
1.88
|
%
|
$
|
28,691
|
$
|
70
|
0.98
|
%
|
||||||||||||
Investment securities and restricted stock
(2)
((2)
|
1,048,291
|
6,838
|
2.61
|
%
|
782,121
|
5,013
|
2.56
|
%
|
||||||||||||||||
Loans receivable
(2)
|
1,304,244
|
15,557
|
4.78
|
%
|
1,065,313
|
12,470
|
4.70
|
%
|
||||||||||||||||
Total interest-earning assets
|
2,365,947
|
22,458
|
3.81
|
%
|
1,876,125
|
17,553
|
3.75
|
%
|
||||||||||||||||
Other assets
|
129,077
|
111,493
|
||||||||||||||||||||||
Total assets
|
$
|
2,495,024
|
$
|
1,987,618
|
||||||||||||||||||||
Interest-earning liabilities:
|
||||||||||||||||||||||||
Demand – non-interest bearing
|
$
|
481,548
|
$
|
355,325
|
||||||||||||||||||||
Demand – interest bearing
|
844,405
|
1,549
|
0.74
|
%
|
659,859
|
695
|
0.42
|
%
|
||||||||||||||||
Money market & savings
|
699,136
|
1,174
|
0.67
|
%
|
602,710
|
732
|
0.49
|
%
|
||||||||||||||||
Time deposits
|
125,607
|
366
|
1.17
|
%
|
105,820
|
295
|
1.12
|
%
|
||||||||||||||||
Total deposits
|
2,150,696
|
3,089
|
0.58
|
%
|
1,723,714
|
1,722
|
0.40
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
1,669,148
|
3,089
|
0.74
|
%
|
1,368,389
|
1,722
|
0.50
|
%
|
||||||||||||||||
Other borrowings
|
101,829
|
573
|
2.26
|
%
|
35,119
|
342
|
3.91
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
1,770,977
|
3,662
|
0.83
|
%
|
1,403,508
|
2,064
|
0.59
|
%
|
||||||||||||||||
Total deposits and other borrowings
|
2,252,525
|
3,662
|
0.65
|
%
|
1,758,833
|
2,064
|
0.47
|
%
|
||||||||||||||||
Non-interest bearing other liabilities
|
8,952
|
8,345
|
||||||||||||||||||||||
Shareholders' equity
|
233,547
|
220,440
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
2,495,024
|
$
|
1,987,618
|
||||||||||||||||||||
Net interest income
(2)
|
$
|
18,796
|
$
|
15,489
|
||||||||||||||||||||
Net interest spread
|
2.98
|
%
|
3.16
|
%
|
||||||||||||||||||||
Net interest margin
(2)
|
3.19
|
%
|
3.31
|
%
|
For the six months ended
June 30, 2018
|
For the six months ended
June 30, 2017
|
|||||||||||||||||||||||
(dollars in thousands)
|
Average Balance
|
Interest
|
Yield/
Rate
(1)
|
Average Balance
|
Interest
|
Yield/
Rate
(1)
|
||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Federal funds sold and other interest-earning assets
|
$
|
26,844
|
$
|
235
|
1.77
|
%
|
$
|
26,323
|
$
|
131
|
1.00
|
%
|
||||||||||||
Investment securities and restricted stock
(2)
|
1,032,038
|
13,325
|
2.58
|
%
|
795,003
|
10,045
|
2.53
|
%
|
||||||||||||||||
Loans receivable
(2)
|
1,269,875
|
29,922
|
4.75
|
%
|
1,036,979
|
23,808
|
4.63
|
%
|
||||||||||||||||
Total interest-earning assets
|
2,328,757
|
43,482
|
3.77
|
%
|
1,858,305
|
33,984
|
3.69
|
%
|
||||||||||||||||
Other assets
|
128,045
|
106,683
|
||||||||||||||||||||||
Total assets
|
$
|
2,456,802
|
$
|
1,964,988
|
||||||||||||||||||||
Interest-earning liabilities:
|
||||||||||||||||||||||||
Demand – non-interest bearing
|
$
|
456,530
|
$
|
342,243
|
||||||||||||||||||||
Demand – interest bearing
|
868,832
|
2,806
|
0.65
|
%
|
640,084
|
1,303
|
0.41
|
%
|
||||||||||||||||
Money market & savings
|
693,508
|
2,146
|
0.62
|
%
|
604,933
|
1,430
|
0.48
|
%
|
||||||||||||||||
Time deposits
|
127,740
|
735
|
1.16
|
%
|
106,866
|
591
|
1.12
|
%
|
||||||||||||||||
Total deposits
|
2,146,610
|
5,687
|
0.53
|
%
|
1,694,126
|
3,324
|
0.40
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
1,690,080
|
5,687
|
0.68
|
%
|
1,351,883
|
3,324
|
0.50
|
%
|
||||||||||||||||
Other borrowings
|
71,360
|
758
|
2.14
|
%
|
44,078
|
708
|
3.24
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
1,761,440
|
6,445
|
0.74
|
%
|
1,395,961
|
4,032
|
0.58
|
%
|
||||||||||||||||
Total deposits and other borrowings
|
2,217,970
|
6,445
|
0.59
|
%
|
1,738,204
|
4,032
|
0.47
|
%
|
||||||||||||||||
Non-interest bearing other liabilities
|
9,171
|
8,307
|
||||||||||||||||||||||
Shareholders' equity
|
229,661
|
218,477
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
2,456,802
|
$
|
1,964,988
|
||||||||||||||||||||
Net interest income
(2)
|
$
|
37,037
|
$
|
29,952
|
||||||||||||||||||||
Net interest spread
|
3.03
|
%
|
3.11
|
%
|
||||||||||||||||||||
Net interest margin
(2)
|
3.21
|
%
|
3.25
|
%
|
For the three months ended
June 30, 2018 vs. 2017
|
For the six months ended
June 30, 2018 vs. 2017
|
|||||||||||||||||||||||
Changes due to:
|
Changes due to:
|
|||||||||||||||||||||||
(dollars in thousands)
|
Average
Volume
|
Average
Rate
|
Total
Change
|
Average
Volume
|
Average
Rate
|
Total
Change
|
||||||||||||||||||
Interest earned:
|
||||||||||||||||||||||||
Federal funds sold and other
interest-earning assets
|
$
|
(65
|
)
|
$
|
58
|
$
|
(7
|
)
|
$
|
5
|
$
|
99
|
$
|
104
|
||||||||||
Securities
|
1,733
|
92
|
1,825
|
3,060
|
220
|
3,280
|
||||||||||||||||||
Loans
|
2,752
|
335
|
3,087
|
5,300
|
814
|
6,114
|
||||||||||||||||||
Total interest-earning assets
|
4,420
|
485
|
4,905
|
8,365
|
1,133
|
9,498
|
||||||||||||||||||
Interest expense:
|
||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
354
|
500
|
854
|
739
|
764
|
1,503
|
||||||||||||||||||
Money market and savings
|
172
|
270
|
442
|
287
|
429
|
716
|
||||||||||||||||||
Time deposits
|
58
|
13
|
71
|
120
|
24
|
144
|
||||||||||||||||||
Total deposit interest expense
|
584
|
783
|
1,367
|
1,146
|
1,217
|
2,363
|
||||||||||||||||||
Other borrowings
|
317
|
(86
|
)
|
231
|
259
|
(209
|
)
|
50
|
||||||||||||||||
Total interest expense
|
901
|
697
|
1,598
|
1,405
|
1,008
|
2,413
|
||||||||||||||||||
Net interest income
|
$
|
3,519
|
$
|
(212
|
)
|
$
|
3,307
|
$
|
6,960
|
$
|
125
|
$
|
7,085
|
Basel III Community Banks
Minimum Capital Ratio Requirements
|
|||||||
2016
|
2017
|
2018
|
2019
|
||||
Common equity tier 1 capital (CET1)
|
5.125%
|
5.750%
|
6.375%
|
7.000%
|
|||
Tier 1 capital (to risk-weighted assets)
|
6.625%
|
7.250%
|
7.875%
|
8.500%
|
|||
Total capital (to risk-weighted assets)
|
8.625%
|
9.250%
|
9.875%
|
10.500%
|
(dollars in thousands)
|
Actual
|
Minimum Capital
Adequacy
|
Minimum Capital
Adequacy with
Capital Buffer
|
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
|
||||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||
At June 30, 2018:
|
||||||||||||||||||||||||||||||||
Total risk-based capital
|
||||||||||||||||||||||||||||||||
Republic
|
$
|
222,372
|
13.66
|
%
|
$
|
130,234
|
8.00
|
%
|
$
|
160,758
|
9.875
|
%
|
$
|
162,792
|
10.00
|
%
|
||||||||||||||||
Company
|
254,493
|
15.62
|
%
|
130,346
|
8.00
|
%
|
160,895
|
9.875
|
%
|
-
|
-
|
%
|
||||||||||||||||||||
Tier 1 risk-based capital
|
||||||||||||||||||||||||||||||||
Republic
|
214,806
|
13.20
|
%
|
97,675
|
6.00
|
%
|
128,199
|
7.875
|
%
|
130,234
|
8.00
|
%
|
||||||||||||||||||||
Company
|
246,927
|
15.16
|
%
|
97,759
|
6.00
|
%
|
128,309
|
7.875
|
%
|
-
|
-
|
%
|
||||||||||||||||||||
CET 1 risk-based capital
|
||||||||||||||||||||||||||||||||
Republic
|
214,806
|
13.20
|
%
|
73,257
|
4.50
|
%
|
103,780
|
6.375
|
%
|
105,815
|
6.50
|
%
|
||||||||||||||||||||
Company
|
235,927
|
14.48
|
%
|
73,319
|
4.50
|
%
|
103,869
|
6.375
|
%
|
-
|
-
|
%
|
||||||||||||||||||||
Tier 1 leveraged capital
|
||||||||||||||||||||||||||||||||
Republic
|
214,806
|
8.60
|
%
|
99,927
|
4.00
|
%
|
99,927
|
4.00
|
%
|
124,909
|
5.00
|
%
|
||||||||||||||||||||
Company
|
246,927
|
9.88
|
%
|
99,993
|
4.00
|
%
|
99,993
|
4.00
|
%
|
-
|
-
|
%
|
||||||||||||||||||||
At December 31, 2017:
|
||||||||||||||||||||||||||||||||
Total risk-based capital
|
||||||||||||||||||||||||||||||||
Republic
|
$
|
187,732
|
12.57
|
%
|
$
|
119,446
|
8.00
|
%
|
$
|
138,109
|
9.25
|
%
|
$
|
149,307
|
10.00
|
%
|
||||||||||||||||
Company
|
249,510
|
16.70
|
%
|
119,521
|
8.00
|
%
|
138,197
|
9.25
|
%
|
-
|
-
|
%
|
||||||||||||||||||||
Tier 1 risk-based capital
|
||||||||||||||||||||||||||||||||
Republic
|
179,133
|
12.00
|
%
|
89,584
|
6.00
|
%
|
108,248
|
7.25
|
%
|
119,446
|
8.00
|
%
|
||||||||||||||||||||
Company
|
240,911
|
16.13
|
%
|
89,641
|
6.00
|
%
|
108,316
|
7.25
|
%
|
-
|
-
|
%
|
||||||||||||||||||||
CET 1 risk-based capital
|
||||||||||||||||||||||||||||||||
Republic
|
179,133
|
12.00
|
%
|
67,188
|
4.50
|
%
|
85,852
|
5.75
|
%
|
97,050
|
6.50
|
%
|
||||||||||||||||||||
Company
|
220,433
|
14.75
|
%
|
67,231
|
4.50
|
%
|
85,906
|
5.75
|
%
|
-
|
-
|
%
|
||||||||||||||||||||
Tier 1 leveraged capital
|
||||||||||||||||||||||||||||||||
Republic
|
179,133
|
7.91
|
%
|
90,531
|
4.00
|
%
|
90,531
|
4.00
|
%
|
113,164
|
5.00
|
%
|
||||||||||||||||||||
Company
|
240,911
|
10.64
|
%
|
90,586
|
4.00
|
%
|
90,586
|
4.00
|
%
|
-
|
-
|
%
|
June 30,
2018
|
December 31,
2017
|
|||||||
Loans accruing, but past due 90 days or more
|
$
|
-
|
$
|
-
|
||||
Non-accrual loans
|
14,106
|
14,845
|
||||||
Total non-performing loans
|
14,106
|
14,845
|
||||||
Other real estate owned
|
6,559
|
6,966
|
||||||
Total non-performing assets
|
$
|
20,665
|
$
|
21,811
|
||||
Non-performing loans as a percentage of total loans, net of unearned income
|
1.07
|
%
|
1.28
|
%
|
||||
Non-performing assets as a percentage of total assets
|
0.81
|
%
|
0.94
|
%
|
(dollars in thousands)
|
June 30,
|
December 31,
|
||||||
2018
|
2017
|
|||||||
30 to 59 days past due
|
$
|
827
|
$
|
1,113
|
||||
60 to 89 days past due
|
129
|
-
|
||||||
Total loans 30 to 89 days past due
|
$
|
956
|
$
|
1,113
|
(dollars in thousands)
|
June 30
,
2018
|
December 31,
2017
|
||||||
Beginning Balance, January 1
st
|
$
|
6,966
|
$
|
10,174
|
||||
Additions
|
-
|
291
|
||||||
Valuation adjustments
|
-
|
(3,000
|
)
|
|||||
Dispositions
|
(407
|
)
|
(499
|
)
|
||||
Ending Balance
|
$
|
6,559
|
$
|
6,966
|
(dollars in thousands)
|
June 30
,
2018
|
December 31, 2017
|
||||||
Total nonperforming loans
|
$
|
14,106
|
$
|
14,845
|
||||
Nonperforming and impaired loans with partial charge-offs
|
4,719
|
1,449
|
||||||
Ratio of nonperforming loans with partial charge-offs to total loans
|
0.36
|
%
|
0.12
|
%
|
||||
Ratio of nonperforming loans with partial charge-offs to total nonperforming loans
|
33.45
|
%
|
9.76
|
%
|
||||
Coverage ratio net of nonperforming loans with partial charge-offs
|
160.33
|
%
|
593.44
|
%
|
Exhibit Number
|
Description
|
Location
|
||
3.1
|
Amended and Restated Articles of Incorporation of Republic First Bancorp, Inc.
|
|||
3.2
|
Amended and Restated By-laws of Republic First Bancorp, Inc.
|
|||
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Republic First Bancorp, Inc.
|
|||
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Republic First Bancorp, Inc.
|
|||
32.1
|
Section 1350 Certification of Harry D. Madonna
|
|||
32.2
|
Section 1350 Certification of Frank A. Cavallaro
|
|||
101
|
The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets as of June 30, 2018
and December 31, 2017, (ii) Consolidated Statements of Income for the three and six months ended June 30, 2018
and 2017, (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018
and 2017, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2018
and 2017, (v) Consolidated Statements of Changes in Shareholders' Equity for the six months ended June 30, 2018 and 2017, and (vi) Notes to Consolidated Financial Statements.
|
|||
REPUBLIC FIRST BANCORP, INC.
|
||
Date: August 7, 2018
|
By:
|
/s/ Harry D. Madonna
|
Harry D. Madonna
|
||
President and Chief Executive Officer
(principal executive officer)
|
||
Date: August 7, 2018
|
By:
|
/s/ Frank A. Cavallaro
|
Frank A. Cavallaro
|
||
Executive Vice President and Chief Financial Officer
(principal financial and accounting officer)
|
||
1. |
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 of Republic First Bancorp, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 7, 2018
|
/s/ Harry D. Madonna
|
||
President and Chief Executive Officer
|
1. |
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 of Republic First Bancorp, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 7, 2018
|
/s/ Frank A. Cavallaro
|
||
Executive Vice President and Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Date: August 7, 2018
|
/s/ Harry D. Madonna
|
|
President and Chief Executive Officer
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Date: August 7, 2018
|
/s/ Frank A. Cavallaro
|
|
Executive Vice President and Chief Financial Officer
|